The Case: HOW MUCH VALUE ARE WE PROVIDING?

Ryan is the marketing manager for Smarter Sales, an organization that provides business intelligence to other businesses specializing in sales. Generally, their business model involves researching the client organization, conducting targeted surveys or interviews, implementing a change, and observing the effect on organizational profits. For example, one of Smarter Sales clients is Jills Used Cars, Jill hired Smarter Sales to conduct a survey of her customers. In that survey, Smarter Sales worked to identify the specific factors that were leading customers to walk off her used car lot without making a purchase. With the results of that survey, Jill was able to change her staffs sales techniques to improve sales.

As a marketing manager, Ryans job is to find ways to bring in new clients. One of the problems that he faces is that Smarter Sales services are often expensive. Employee time is recorded hourly, and this expense is billed directly to clients. However, Ryan wants to find a way to assure clients that his time and expense is worthwhile that Smarter Sales only spends additional hours on a project when those hours will lead to higher profits. To that end, Ryan collects records from all of Smarter Sales clients over the past six months (cost to clients and their profitability). He wants to find evidence that there is a relationship between the ultimate amount of money charged by Smarter Sales (costs to clients) and the increase in client organizational profitability. That means he will have two numbers for each client the total cost to the client and the percentage increase in monthly profit as a result of changes suggested by Smarter Sales. Ryan wants to know if there is a relationship between his clients profitability (Increased Profit (percentage) and how much clients spend in his organization ( Costs to Client (in hundreds of euros).

Questions

1. What is the decision problem in this case?

2. What is the research problem/question in this case?

3. On average, what is the cost of services (Costs to Client (in hundreds of euros) at Smarter Sales? Using best practices in visualizing a frequency distribution, create the appropriate chart to illustrate the distribution of the cost of services at Smarter Sales.

4. For this case, what is the null hypothesis and what is the alternative hypothesis associated with the research question developed in question 2?

5. What is the appropriate statistical procedure to use for the hypothesis testing with this case given the variables under consideration? Calculate the appropriate statistic(s). Please state in a sentence the results of your analysis and your interpretation of the result in the context of the decision problem you have formulated in question 1. Please show your SPSS output used for the analysis by using the print screen or snipping tool.

Bonus Question: (+10 points).

Using SPSS and the appropriate method given the associated data, visualize the linear relationship between cost to clients (Costs to Client (in hundreds of euros )and organizational profitability (Increased Profit (percentage)